Mike Kaluger is Vice President and Assistant General Counsel for Orange Coast Title Company and its subsidiaries. He has been a part of the Orange Coast Title family since 1993.

The information contained in the ASK MIKE column is provided for general information purposes only and is not intended to be a legal opinion nor legal advice nor is it intended to be a complete discussion of all issues related to the law. No attorney client relationship shall be deemed to arise hereunder. Every individual's factual situation is different and you should seek independent legal advice regarding specific situations. All information contained within pertains only to California law unless otherwise noted.

Is it possible to use a grant deed to add additional names to the ownership of a property? In other words, my wife and I are listed as the sole owners of a condo. While we don't want to give up our ownership share, we want to let my parents in on it as well, since they'll be contributing to the monthly mortgage payment and we'd like them to share in the resulting tax benefits.
Additionally, I take it I can complete the deed myself and submit it to the county recorder?

Answer 1:

The short answer is yes, you can use a Grant Deed to add other persons to the title to your property. It wasn't clear, however, if you are asking whether you should use a Grant Deed as opposed to a Quitclaim Deed, but either one would work. Unlike a Grant Deed, which contains certain implied warranties of title, a Quitclaim Deed simply transfers whatever interest the Grantor may hold in the property, if any, at the time the Deed is executed and delivered. Whichever form of Deed you use, it would need to recite that you and your wife are conveying the property to you, your wife, and to your mother and father. It should also state the manner in which you are all taking title (e.g., as tenants in common, as joint tenants, etc.) You and your wife would need to sign the Deed in front of a Notary, and then it would need to be recorded in the office of the County Recorder in the county where the property is located.

You mentioned that you wanted to put your parents on title because they will be making a portion of the payments. However, you didn't indicate whether they had signed the promissory note to the lender along with you. If they didn't, you should be aware that the promissory note and Deed of Trust forms used by most banks and commercial lenders contain what is known as the "due on sale clause". Basically, it states that if the owners of the property transfer their interest, or any PORTION of their interest, to a third party, the lender will have the right to call the loan all due and payable. You might want to review your note and deed of trust to see if that clause is in there.

Finally, be aware that any transfer of an interest in real property can entail significant legal and tax consequences. Before executing the deed, you and your wife should first consult with your own attorney and/or tax adviser to determine what impact the transfer may have on your particular circumstances.

Question 2:

I'm trying to learn more about real estate and I've heard there are two different kinds
of property deeds in California. Can you explain the difference?

Answer 2:

A grant deed is the most common deed used in California because of the implied
warranties which protect the grantee. A grant deed implies that the grantor has not
given any title or interest in the property to anyone else and that the property has no
encumbrances or loans on it, except for those specifically disclosed in the purchase and
sale agreement. With a grant deed, the grantor typically gives the property free and clear
to the grantee. More than 90
percent of the deeds recorded in the state are grant deeds.

If the grantor breaches the implied warranties in a grant deed - for instance, by not
disclosing an unpaid debt on the property - the grantee may rescind the deal and get any
payment back, or may sue for any loss of value that occurred.

The less common type of deed, a quit claim, offers no warranties or protections to the
grantee. It simply grants whatever rights the grantor has, if any, to the grantee. You can
issue a quit claim on the Brooklyn Bridge if you want, even though you own zero interest
in it.

A quit claim plays an important role in some property sales. For instance, if a
married person is selling sole and separate property, the title company frequently will
ask the seller to provide a quit claim from the spouse. This quit claim reassures the
title company that the spouse will not claim half-ownership once the sale occurs.

Question 3:

I purchased a condo with my wife at the time and we have since divorced. We didn't' go to court to settle property. She has decided to give everything to me including the condo. She said she would be happy to sign whatever she needs to. I just don't' know where to start and what docs are needed. I need to get her off title and the mortgage. I think she wanted out to basically not be responsible for it and just leave it to me, which is fine. So if you could give me an idea of where to start that would be great.

Answer 3:

My best advice would be for you both to consult with your respective attorneys. Getting your wife off the title to the property can be accomplished by recording a deed from her to you, but getting her off the mortgage is a bit more problematic. That would require the approval of the lender, who would have to agree to release her from her obligations under the promissory note, and agree to a modification of its Deed of Trust to reflect you as the sole owner.

Question 1:

I'm about ready to become a homeowner, partly because mortgage rates are so low and it
looks like a good time to buy. But I'm concerned about some of the recent ups and downs in
mortgage rates. Could I get stuck with a rate that's higher than I planned for? Is there
anything I can do if I'm in escrow and rates jump suddenly?

Answer 1:

Yes, there is something you can do to protect yourself in a mortgage market that has
experienced some sudden ups and downs: Choose your lender carefully. Many lenders offer a
30-day or 60-day lock-in period for mortgage rates, a
provision that gives you some control over the rate you will pay for the next 30 or so
years.

Typically once you qualify for the loan, you get a set period during which to lock in a
good mortgage rate. Once you lock in that rate, it remains your mortgage rate until the
lock-in period expires, usually 30 or 60 days. You must close your deal within this period
or you lose the rate or pay a premium to keep it. Some lenders will even let you change
your locked-in rate during the lock-in period if mortgage rates fall.

It's important to shop for a loan that gives you this kind of control, if that's what's
important to you. Review the loan documents carefully to make sure you're getting what
you've been promised. Be prepared to meet all the requirements in the fine print to make
this provision work for you. Then start watching mortgage rate trends.

Question 2:

Can a Lender obtain a deficiency judgment against a seller who does a short sale on vacant land they own?

Answer 2:

The short answer to that question is that it will be determined by the provisions of the bank's Short Sale Approval Agreement. There is a prohibition against deficiency judgments following a short sale of a 1 to 4 unit principal residence, but no such prohibition following a short sale of any other type of property. Unless the agreement to waive the deficiency was part of the Short Sale Approval Agreement, the bank is generally allowed to seek a deficiency.

Question 1:

We would like to know what to do in the following situation:

We have a piece of land in Northern California which we haven't built on
yet. We verbally granted our neighbor permission to drive his car on the strip of our
property adjoining his and also park his car there. There is no written easement, nor has
any other person been given any rights to use our property. Unfortunately, we do not live
close by.

What must we do to assure that:

we are able to revoke the neighbor's use of the property when
we build

we are able to prevent other from driving over our land and
creating a precedent for use, or even a hostile easement.

Answer 1:

Thank you for your question regarding your neighbor's use of your
land. The first thing to do would be to write your neighbor a friendly letter, simply
outlining the terms of your agreement, and making it clear that you reserve the right to
revoke his use of your property at any time. You should send it via certified mail, so
that you will have proof of receipt if it ever becomes an issue. Such a
letter would serve to deter him from later
trying to assert a prescriptive easement over your property, because in order to do so, he
would have to prove that his use was adverse to you. If you've given him permission, then
his use of the property could not be
adverse to you as a matter of law.

The situation is a little trickier when it comes to third parties,
however. If a third person uses your property for a period of five (5) years, and the use
is "open, adverse, and notorious", it could potentially ripen into a
prescriptive easement. It doesn't matter whether you were actually aware of the use or
not; the fact that the use was open and obvious to the world would suffice.

From time to time you may have seen little plaques in sidewalks that
say something like "Private property. Permission to pass over revocable at any
time". The purpose of these plaques is to prevent someone from trying to a assert a
"public easement" by prescription. Unfortunately, whether posting such a sign on
your property would be sufficient to prevent some third party from claiming an easement
would depend on the surrounding circumstances.
While posting a "private property" or "no trespassing" sign would be
evidence that anyone using your property does so with your permission, it is not
necessarily conclusive.

There is a code section which attempts to deal with this situation,
however. California Civil Code Section 1008 provides that if a property owner posts a sign
reading "Right to pass by permission, and subject to
control, of owner", then no one will be able to claim an easement by prescription.
This notice must be posted at each entrance to the property, OR at intervals of no more
than 200 feet along the property boundary.
Unfortunately, this statute has not yet been tested in court, so it's difficult to say how
a court might rule in a particular situation. However, posting such a sign would at least
be evidence that the owner attempted to
comply with the statute in order to prevent third parties from claiming prescriptive
easements over the property.

Please note that the foregoing is intended as a general overview of the
law of easements, and is not intended as specific legal advice. Since cases involving
prescriptive easements tend to be very fact specific, you should
consult with your own attorney who can give you specific advice tailored to your
particular circumstances.

Question 2:

I have a couple questions about an easement that I have with another homeowner. As
of right now, the easement in question is about the size of a hallway (4 or 5 feet wide)
between the garage wall of my house and my neighbor's fence/property line. What I
think is weird about this easement is that my neighbor's property is raised, about 4
feet higher than mine. The property is mine but he has almost all of the rights to it. The
only rights that I have are water drainage and the ability to use it as a walkway. This
easement runs the length of my house and down my driveway to the street. My questions
are:

1.What
is the purpose of an easement?

2.Is
there anything that I can do to overturn a declared easement in order to have all rights
to that piece of property?

Answer 2:

The shorthand answer to your question is that an easement is a legal
right to use the property of another, for the purposes specified in the easement document.
To determine what that is, you would have to get a copy of the deed which either granted
or reserved the easement, in order to examine its language. Typically, easements are
granted or reserved for such purposes as ingress, utility lines, etc.

Unfortunately, if the easement is still being used by the holder,
there is little that can be done to get rid of it, short of getting the holder to deed it
over to you. If it hasn't been used for a certain number of years, you might be able
to bring a suit to quiet title to your property based upon an abandonment of the easement.
However, you would have the burden of proving that your neighbor ceased using the easement
with the INTENTION of abandoning its use in the future. This is usually a very difficult
burden to meet.

My best advice would be to consult with your own attorney who could
examine the easement document, and give you specific legal advice tailored to your
particular circumstances.

Question 1:

Someone owes me $2,500 and I'm looking for a simple way to collect it.
Any ideas?
Answer 1:

The easiest way to collect that debt might be to file in small claims court, a
special court in which disagreements can be resolved cheaply and without attorneys. Small
claims actions must be just that: claims of $5,000 or less.
One exception is that no party may file more than two actions in which the amount demanded
is $2,500 or more in the same calendar year in California.

Begin by filling out a plaintiff's claim form available at the small claims desk of a
municipal court in the proper district of the proper county. You may file your claim in
the jurisdiction: where the defendant lives; or where you were injured or your property
damaged; or where you entered into the disputed contract or it was breached.

Once you have filed your claim, the court sets a hearing date and you must ensure that the
defendant is served with your claim. You may pay a small fee to have the county marshal
serve the claim or you may have someone age 18 or over who is not a party to the action
serve the defendant. It is not uncommon for the defendant to offer to settle the case once
served, rather than appear in court.

If the small claims action proceeds, its principal advantage is that it is an informal
procedure conducted without attorneys representing the parties. Each side simply states
his or her case and presents relevant documents. After the hearing, the court enters
judgment and mails each party its decision.

Unlike most courts, only the defendant - not the plaintiff - may appeal the
judgment. Any appeal would be tried in Superior Court as a new trial, treating the small
claims hearing as if it never occurred. At this point, the parties may be represented by
attorneys.

A small claims court action typically costs less than $50 in fees, making it an ideal
solution to disputes involving small dollar amounts. In fact, because of its low cost and
simple procedures, some people owed slightly more than $5,000 will decide to seek just
$5,000 of the outstanding debt so that they can take advantage of the informal small
claims court process.

Question 1:

I have Abstract of Judgement and my creditor is obtaining Writ of Execution to sell the
property we live in. There is $75,000.00 homestead. I would like to know how to protect
this homestead proceeds? Judgment will not be satisfied even after the sale of property
due to the senior liens and encumbrances.

1. How to protect $75,000.00 homestead money?

2. How long I have to buy next house?

3. What happens if I don't buy the house and live in rental?

Answer 1:

First of all, the creditor cannot sell the property unless there is excess
equity over and above the amount of the homestead plus all senior liens and encumbrances.
If there is excess equity, however, and the creditor sells the property, the homestead
proceeds would be exempt from execution for a period of six (6) months following the date
of the sale. If you reinvest the proceeds in a new dwelling that qualifies as a homestead,
and record a homestead declaration against the new property within that six (6) month
period, the exemption will continue into the new property. However, if you fail to
reinvest the proceeds within the six (6) month period, the homestead proceeds would then
be available for execution by your creditors.

Question 2:

Do I have to file a homestead form when I purchase a home in California or can I wait
until I have a potential problem and then file?

Answer 2:

The short answer to your question is fairly simple. You can record a homestead
declaration at any time, so long as you actually reside in the property as your principal
residence at time you record it. A declared homestead will be recognized as an
exemption in a bankruptcy proceeding and can be recorded even if a creditor has already
filed suit to collect a debt.

Be aware, however, that a declared homestead will only protect you from subsequently
recorded judgment liens. This means that if a judgment lien was recorded before you
filed a homestead declaration, the judgment lien will have priority and the creditor can
enforce it despite your homestead declaration.

Homestead provisions are designed to protect a family from being forced out of their home
by creditors, within specific limits. You should understand that two types of
homestead exist under California law. One is the declared homestead discussed above,
while the other is the homestead exemption, or residential exemption as it is sometimes
called.

The residential exemption is an automatic exemption for the dwelling in which the debtor
or his family resides. It offers protections similar to a declared homestead, with
matching exemption amounts and recognition in bankruptcy proceedings. The major
requirement is that the debtor and his family must reside in the property at the time of
the bankruptcy filing and do not vacate it afterward. The residential exemption's
objective is to provide debtors with an exemption roughly equivalent to the one afforded
by a declared homestead.

Although their protections are similar, there are some important differences. The major
difference is that the residential exemption does not prevent a judgment lien from
attaching to the property. A creditor can force a sale if a minimum bid is received
which exceeds the exemption amount plus other liens and encumbrances.

In contrast, if a homestead declaration has been recorded, a judgment lien will attach
only if there is any surplus equity over and above the amount of the homestead exemption,
plus other liens and encumbrances. If there is no surplus equity, the judgment lien
does not attach. In some circumstances, this could be an important distinction.

Another consideration is that the debtor must reside in the property continuously to
qualify for the residential exemption. That requirement is not lifted until the
property is ruled exempt in a court proceeding brought by a judgment creditor to force the
sale of the property. In the case of a declared homestead, the debtor needs to
reside in the property only at the time it is recorded. Its protections continue
even if the debtor moves out.

Finally, keep in mind that both homestead types guard only against judgment liens.
If you voluntarily create a lien secured by a deed of trust, a homestead exemption offers
no protection at all against that debt.

Question 3:

I want to buy a home from a friend who's had legal trouble. I understand there may be a
judgment lien against this house. My friend says not to worry, the property is homesteaded
and the lien won't attach if I buy the house. Is he right?

Answer 3:

It depends. Generally, under the Code of Civil Procedure, a judgment lien attaches to all
property the debtor owns in the county or any property he acquires after the lien is
filed. Assuming the lien attaches, it will follow the property after any sale.
However, in the case of a homesteaded property - a protection your friend says he has
obtained - a judgment lien will attach only if there is some excess equity over the
homestead amount plus existing liens and encumbrances, such as a mortgage.

For instance, if your friend is selling the home for the amount of the mortgage plus a
small amount that falls under homestead protection, the lien may not follow the property
because there probably is no value for it to attach. But if he sells the house and retains
a large amount of equity that is not homestead-protected, the lien will follow the
property and you run the risk of the house being foreclosed to pay his debts.

This is a complex situation. You should consult an attorney to verify that homesteading
protection applies here and that you will not be affected by his legal problems if you buy
the house.

Question 4:

We heard that if you have an Abstract of Judgment on a home and you
file a Homestead for $125,000, when you close escrow, the following things happen:

1.You
pay the mortgage off

2.The
RE and Escrow get paid.

3.You
get the $125,000 because the home had been homesteaded.

4.The
"Abstract of Judgment" gets whatever is "left out of the
equity".

Have you ever heard of this before?

Answer 4:

Unfortunately, the information you heard about a Homestead in an
escrow situation is not correct. The Homestead only comes into play when a judgment
creditor levies on the homesteaded property, and seeks to sell it to satisfy the judgment.
In that case, the property can only be sold if there is any equity over and above the
amount of the homestead, plus the senior liens and encumberances. If there is sufficient
equity, then thejudgment debtor gets to keep the homestead amount out of the sale
proceeds, and only the difference goes to satisfy the debt.

However, this is not the case in an escrow for a VOLUNTARY sale of
the property. Typically, the escrow agent is instructed to pay all liens and encumberances
out of the escrow proceeds. In doing so, the escrow agent does NOT take the homestead into
account. If there is an Abstract of Judgment, it will be paid in full whether or not there
is a homestead against the property. More importantly, a title company cannot issue a
policy to the new buyer and/or lender without showing the Abstract as an exception from
coverage. In most cases, that would be enough to kill the deal.

Question 1:

I'm thinking about buying a house at a foreclosure sale. I hear it's a
great way to get a bargain. But this is all new to me. Are there legal pitfalls in
foreclosures I need to avoid?

Answer 1:

Foreclosure sales can be tricky. The first thing you need to know is exactly what kind of
foreclosure situation you are entering. In purchasing a foreclosed property, you would be
buying property from someone who held a promissory note secured by a deed of trust on the
property and has not been paid on the note. Foreclosure can take one of two forms.

By far the most common form is the non-judicial trustee's sale. Under the power of sale
provision found in most deeds of trust, the trustee is empowered to sell the property upon
demand of the note holder when the debtor defaults. The trustee will record a Notice of
Default and Election to sell, giving the debtor three months to cure the default
and reinstate the loan by paying what's owed plus the costs and expenses of
foreclosure. If this is not done, the trustee will then record and publish a notice of
trustee's sale, at which the property will be sold to the highest bidder. The debtor has
no legal recourse to get the property back once it is auctioned.

For instance, U.S. Housing and Urban Development (HUD) foreclosures typically are this
type of foreclosure.

The other type of foreclosure is the judicial foreclosure. This is actually a lawsuit, in
which the note holder asks the court to order the property sold to pay the debt.
Typically, the county sheriff would sell the foreclosed property to the highest bidder at
public auction.

From your standpoint, the principal difference between the two is that under a judicial
foreclosure, the property owner has one full year from the sale date to redeem the
property. That means that the property owner has one year to pay the debt and all
foreclosure costs, and then reclaim the property from you. You don't lose your money, but
you do lose the property.

While the property technically is saleable during this one-year period, you would face the
challenge of trying to sell a property which has the possibility of going back to the
owner. In addition, title insurance can be difficult to obtain until the redemption period
has passed. If you plan to live in the house, you risk having to move again before the
year is out.

I have a client that has property that he took title to with no consideration. There are two loans on the property which he is currently paying but they are not in his name. The prior owner cannot be found which will cause difficulties in selling and there is way too much owed so the property may be foreclosed on. My question is because he is on title but not on the loans, what is the liability to the owner on title? FYI â€“ one loan is a line of credit.

Answer 2:

If the current owner didn't assume the loans, he would have no personal liability. He would simply lose the property in foreclosure if the loans aren't paid.

Question 1:

I won a judgment against another person in court some time ago and recorded a judgment
lien against his property in this county. Now he wants to sell one of those properties and
he's offered to make a deal to pay part of the judgment, but not all of it. I
don't want to release my judgment lien and lose my ability to claim the full amount
he owes me. What can I do?

Answer 1:

Under the Code of Civil Procedure, a creditor like yourself may release the judgment lien
from a particular property while retaining it on other property. In other words, you
don't have to give up your right to be paid in full at some point.

You can negotiate with this debtor to pay a part of what he owes you and agree to release
the judgment lien against only the property he wants to sell. You will have to prepare a
release of judgment lien, sign it, have it notarized and record it in the county where the
property is located.

Most importantly, the release must identify the specific property you are releasing from
the lien, to prevent any misunderstanding that you are releasing the judgment lien against
all his properties in the county. A number of very specific items related to your judgment
must be cited in this release. Be sure to consult an attorney to guarantee that it is
properly prepared and that you retain your right of payment.

Question 1:

I own a small apartment building and I'm really concerned about having a waterbed in
the building, especially on an upper floor. A recent apartment applicant looked like
a great potential tenant, except that he had a waterbed. He told me I couldn't
refuse to rent to him just because his bed might leak. What can I do to protect my
property against the risk of a major waterbed spill?

Answer:

The law doesn't specifically allow discrimination against waterbed owners. It does,
however, provide landlords with some protection. You are allowed to guard against
potential damage by requiring an extra security deposit - equal to one-half month's rent -
of a tenant who owns a waterbed. That is in addition to the normal security deposit
you require of your other tenants.

Of course, if the tenant moves out and the waterbed has caused no damage to the unit or
the building, you must return that waterbed deposit. If there is damage, you must
give the tenant an itemized statement of expenses to repair the damage and a refund of any
excess deposit. The three-week rule for returning or applying security deposits also
applies to this waterbed deposit.

Question 2:

With property values increasing, I'm interested in buying an apartment building.
I've never been a landlord but I know I want to protect my investment. I'm wondering
how much security deposit I could charge to make sure tenants don't trash the place and
leave me in the lurch. Can you help?

Answer 2:

The amount of a residential property security deposit depends on the length of the
lease and whether the apartment is furnished or unfurnished. Typically, a landlord
asks for a security deposit and some rent up front. State law says the total of rent
and security deposit requested cannot exceed two month's rent for an unfurnished
residential property or four month's rent for a furnished property. If you offer a
six months or longer lease term, you can collect up to six month's rent in advance.
Finding a renter under those terms might be difficult, however.

Once the lease is terminated, a landlord has three weeks to refund any security deposit
or provide the tenant with an itemized statement of expenses and a refund on the balance.
If you don't return a security deposit promptly, you face statutory penalties of up
to $600 in addition to actual damages to the tenant.

By law, a tenant's security deposit may only be used for the following: to compensate the
landlord for unpaid rent; to repair damage inflicted by the tenant or guests, excluding
normal wear and tear; cleaning the unit after the tenant has vacated; and remedying
additional defaults by the tenant. State law does not allow residential landlords to
charge any additional fees. Some landlords have tried charging a separate
"administrative fee," but the courts view any money paid to secure performance
of a residential lease as a security deposit and subject it to the rules I just reviewed.

The decision to purchase rental property is an important one with many legal and tax
implications. I urge you to consult your own legal and tax advisors before making
such a decision.

Question 1:

I am a real estate agent. I have a client who owns a house and is not
working at this time. She has a mortgage of about $110,000. Her boyfriend has been making
the monthly payments since she bought the house. Now she does not want the house anymore.
She told her boyfriend that she will transfer the house to him if he gives her $25,000.
Her boyfriend has very bad credit so he does not qualify to buy the house. Recently she
had surgery and the county paid all her expenses at the hospital. If she gives a grant
deed to her boyfriend and he records it, will the bank call the loan? Will the county
record a lien on the house due to the fact that the hospital paid for the surgery?

Answer 1:

While it is always hard to guess just what someone else might do in a
particular case, this is one where I would urge caution on the part of your client.

Typically, most promissory notes and deeds of trust prepared by banks
and other institutional lenders contain a "due on sale" clause which allows them
to call the loan due if the borrower transfers the property, or any interest in the
property, to someone else without the lender's consent. If that clause is in your
client's loan documents, it would give the bank the legal right to call the loan, but
whether it would actually do so would be a business decision on their part. However, since
the boyfriend is not terribly credit worthy, this might make them more ready to call the
loan than if he had a stronger financial position.

I'm not familiar with the law involving payments of medical
bills by the county, but if it allows them to put a lien on a patient's property,
they might try and set the transfer of the house aside as being a conveyance in fraud of
creditors. A "fraudulent conveyance" is one by an owner of property for less
than adequate consideration, which prevents a creditor from reaching the property in order
to satisfy its claims. The question, then, is whether $25,000 is adequate consideration
for the house. If there is only $25,000 in equity, and the boyfriend also agrees to assume
liability under the loan, then it might suffice. Unfortunately, this would be a question
of fact to be determined by the court if the transfer was ever attacked.

Please be advised that any transfer of real property can involve
significant tax and legal consequences, particularly where creditors are involved.
Accordingly, your client should not transfer any interest in her property without first
speaking with her own attorney and tax advisor, who can give her specific advice tailored
to her particular circumstances.

Question 2:

Could I please ask you a question in regard to a Lis Pendens. The Lis
Pendens was filed on February 6th against a Seller or a property by parties
which had a lawsuit against him.

The Seller sold his property to another buyer on February 8th,
without informing the new buyer of the lawsuit. Apparently the title company did not catch
the Lis Pendens.

My question is this: is the sale still legal? I believe it is, but
when then happens to the Lis Pendens? My understanding was that Lis Pendens is against a
person as opposed to being against any particular property. Is that correct?

Answer 2:

What a Lis Pendens does is to impart constructive notice to the world
that the plaintiff has filed a lawsuit concerning title to, or the right of possession of,
a particular piece of real property. A sale of the property is legal; it simply means that
whoever buys it does so subject to the outcome of the plaintiff's lawsuit. In other
words, if the plaintiff wins, it could negatively impact the buyer's title, if not
divest him of it altogether. For this reason, title companies generally will not insure a
sale where the property is subject to a Lis Pendens.

In this case, the title company could have simply missed the Lis
Pendens during the searching process, or they could have made an underwriting decision
that the Lis Pendens was in some way invalid. Given the relative proximity between the
recordation date of the Lis Pendens and the date of the sale, however, I would suspect
that the Lis Pendens simply had not yet been posted to the title company's plant
information.

One
thing to note, though, is that even though the Lis Pendens was recorded prior to the sale,
it would not be as effective against the new owner unless it was properly indexed by
the county recorder's office before the buyer's deed recorded. Case law holds
that it is the date of indexing, not the recordation date, that determines when a
document imparts constructive notice to the world. Generally there is a two (2) to three
(3) day lag time in most recorder's offices between the recordation date stamped on
the document and the date it is actually indexed, it is possible that the Lis Pendens had
not yet been indexed when the buyer's deed recorded.If that's the case, then the buyer would take title free and clear of
the Lis Pendens and the underlying lawsuit.

Question 1:

I bought a foreclosed condominium from a bank recently. After I moved in, the condo
association notified me that it had filed a lien against the property for association dues
the previous owner hadn't paid. He was several thousand
dollars behind when the bank foreclosed on his condo. The condo association wants to
collect from me. Can the association force me to pay a debt that's not mine?

Answer 1:

Probably not. The priority of a lien is determined by the date it was recorded. Since the
deed of trust signed to allow the original purchase of the condo would have been recorded
first, it takes priority over a lien filed years later over unpaid condominium association
dues. You can check your title policy to make sure the condo association lien is junior to
the deed of trust lien.

Assuming it is, that means the foreclosure on the original deed of trust would have wiped
out the more recent condo association lien. Neither the bank that foreclosed nor the new
owner - you - can be held liable for it. The association dues do, however, remain the
responsibility of the prior owner and the condominium association is free to pursue him in
court. Of course, you are responsible for paying all association dues that accrued after
you bought the property.

Question 1:

I signed a contract to sell my house with a real estate
broker, who located a potential buyer. The deal fell through when the buyer couldn't
complete the transaction. There's a chance that this buyer might clear up his
financial problems and be able to buy my house in a few months. If I let my listing
agreement with my broker expire but go ahead and sell to this buyer, am I obligated to pay
the broker a commission?

Typically, such an agreement provides that any consummated sale with a
prospect located by the broker results in a commission for the broker. If the buyer was
identified during the listing period, a sale occurring after the listing period expires
still requires that a commission be paid.

It always is important to read documents associated with the complicated
process of buying and selling real estate. You want to know what your obligations and
responsibilities are before you proceed, not figure them out after it's too late.

Question 2:

I put my house up for sale and got an offer from a serious buyer
right away. After some back-and-forth negotiations, I accepted a $311,000 offer. Almost
immediately, another offer for $323,000 was submitted. Can I back out of the
first deal and accept the better offer? What are my options?

Answer 2:

It depends. You can only accept the better offer if you don't have a binding contract with
the person who offered $300,000. Under law, a binding contract exists when you have an
offer, acceptance and consideration. If, as it appears, you accepted the first offer, you're probably stuck with it.

If you attempt to rescind the contract to sell at $300,000, the person who lost the house
can sue you. A judge could compel you to sell the house as agreed at $300,000 to the
spurned buyer. The judge also could award damages.

If you have an apparent contract, you might keep the second offer in reserve. If your
escrow falls through because the buyer can't get financing, for instance, you then would
be free to accept the second offer.

Question 3:

I have seen many listings with "terms" stating "Cash, Conventional, NO FHA" or "Cash and Conventional only". Is that legal? What is a legal way to show terms that I won't get in trouble for even if my seller says "No FHA"?

When I screen tenants, if questions come up like "Do you accept Section 8", is it legal to say "NO"?

Answer 3:

Thank you for your questions, in answer to your first one, it is perfectly legal to specify "No FHA" as a condition of purchase. There is no requirement for a seller to accept FHA financing. It's also legal to refuse to accept Section 8 financing, provided it's not a dedicated Section 8 property.

Question 1:

The branches of my neighbor's eucalyptus trees hang over my yard and drop leaves onto my
lawn. It makes a mess and he refuses to do anything about it. I'm also worried that the
trees could crash onto my property during strong Santa Ana winds. What can I do?

Answer 1:

As a general rule, you have the right to cut back the branches of your neighbor's trees to
the property line without filing suit or going to court. Of course, you would have to this
at your own cost.

If that doesn't solve your problem, you can go to court to seek an injunction allowing you
to trim beyond your property line or remove the trees. You might argue that the trees are
a nuisance or that they are so large and overhanging that they might fall during a
windstorm and damage your property. Either argument might convince the court to allow you
to remove or cut back the trees.

On the other hand, if a tree does fall and cause property damage, your neighbor is liable
if he failed to properly maintain the tree.

You didn't say exactly where the trees are located. If the trees sit smack on your common
property line, they belong to the adjoining property owners and can't be cut down without
permission of both owners or a court ruling. You still have the right to cut the branches
back to the property line, but don't touch the roots or the trunk without a court ruling
on your side.

Question 2:

One day, my new next-door neighbor started tearing down the fence between our
yards. It turns out he'd done a property survey and discovered that the fence -
originally erected in 1924 - was not on the property line, which is actually two feet
farther over on my property. He plans to tear down full-grown trees and shrubbery
that make my backyard a wonderful refuge and put a new fence on the actual property
line. Is there anything I can do? I've heard that something called an agreed-upon
boundary doctrine might help me.

Answer 2:

Unfortunately, it does not appear that the agreed-upon boundary doctrine will come to
your rescue. This legal provision allows two parties to agree on a mutually
acceptable property line when it cannot be determined. For instance, if a lot once
had a single owner and the legal descriptions written when the property was divided
overlap, the two owners can designate an acceptable boundary. This doctrine cannot be used
when the property line can be objectively determined, as it apparently can in your
case. I suggest you consult your own attorney and consider proposing some kind of
compromise with your neighbor.

Question 3:

I live in a neighborhood with very
small lots. Because I was planning on adding a deck to my home, I did a survey of my
property. I was surprised to discover that my next-door neighbor's garage juts over my
property line by a couple of feet. Should I ignore it or could I lose rights to that part
of my property if I don't take action? The neighbor and I are on fairly good terms and I
haven't said anything yet.

Answer 3:

It would be smart to address this
issue now, since you indeed could lose the right to that part of your property if you know
about the problem and ignore it for years. On the other hand, it doesn't sound as if you
want to make your
neighbor tear down the garage for lack of a few feet of dirt.

Since you are on good terms with your neighbor, your first step might be to try to
negotiate a mutually acceptable solution with the help of an attorney. The attorney will
take a look at the situation and recommend whether you and
your neighbor might do a lot line adjustment or a permanent easement. You would typically
seek a payment in exchange for granting an adjustment or an easement. If you approach this
with a cooperative attitude, you and your
neighbor might be able to resolve this situation with a legally binding agreement.

If you can't reach agreement, you can file a lawsuit. The courts will balance the rights
of both parties, determining the hardship of requiring the garage owner to remove it
versus the harm to you of allowing the garage to remain. The court might consider, for
instance, whether the encroachment was intentional and how much of your land is involved.
If it would cost the garage owner a disproportionate amount of money to tear it down while
it wouldn't really interfere with much of your land to let the garage remain, the court
might grant a permanent easement across your property and award you money damages to
compensate you for that loss.

Of course there's no way to predict the outcome of a lawsuit, so a negotiated settlement
that satisfies both you and your neighbor probably would be preferable. It also would
allow you to continue your neighborly relationship with no hard feelings.

Question 4:

I don't get along with a next-door neighbor whose yard is a mess. I've asked him
repeatedly to clean it up, but he won't cooperate. We don't have a homeowners association
I can complain to. Can I put up a fence so I don't have to look at his yard any more?

Answer 4:

As a general rule, a property owner has an absolute right to put up a fence along the
property boundary or anywhere within his own property. The neighbor would have no grounds
to complain. But you do need to be aware of the rule against "spite fences."

A spite fence is defined as any structure like a fence which unnecessarily exceeds 10 feet
in height and which has been erected maliciously or for the purpose of annoying or
harassing a neighbor. The offending structure doesn't have to be an actual fence. It could
be a high hedge or it could be a low fence upon which foliage has been allowed to grow
higher than 10 feet. A spite fence would be considered a nuisance and could lead to legal
action by your neighbor.

Even a lower fence can be considered a spite fence. In one case, a property owner built a
structure with a huge dirt and concrete foundation, a wall and an ugly fence, all reaching
a height of less than 10 feet. The owner also committed other acts of harassment,
including trespassing and destroying the neighbor's flower bed, moving full garbage cans
under the neighbor's dining room window, and stringing clanging tin can lids along the
property line to keep the neighbor awake at night. The court found that the purpose of the
fence was not to screen the property but to increase the stakes in a campaign of
harassment against the neighbor.

The bottom line is that if you put up an attractive fence no more than 10 feet in height
and don't take any other actions against your neighbor, you are within your rights. In
your case, it might be an easy solution to an
annoying situation.

Question 1:

I just heard that California recently passed a law that provides for something called
"community property with right of survivorship". Can you tell me a little bit
about it?

Answer 1:

On July 1, 2001, California Civil Code Â§ 682.1 goes into effect, which establishes a
new form of holding title known as community property with right of survivorship. This new
form of ownership combines the survivorship rights of joint tenancy with the tax
advantages of community property, and can be used in connection with conveyance
instruments created on or after that date.

Typically, married couples will hold title either as joint tenants or as community
property. Joint tenancy is a popular device for avoiding probate, since upon the death of
one joint tenant the decedent's interest vests immediately in the survivor. There is no
need for probate, because there is nothing to pass with the decedent's estate. Recording a
simple document known as the Affidavit Death of Joint Tenant can be used to terminate the
joint tenancy.

In contrast, there is no automatic right of survivorship with community property. The
decedent's interest passes as part of his or her estate, and does not pass automatically
to the spouse. It is only when the decedent dies without a will leaving property that
would otherwise pass to his or her spouse under the laws of intestate succession, or dies
with a will leaving the property to the spouse, that community property can pass without
probate.

The main advantage to holding title as community property, however, is that upon the
death of one spouse the entire property receives a step-up in basis for tax purposes. In
contrast, if the spouses hold title as joint tenancy, only the decedent's one-half of the
property will receive the step up in basis. This can make a significant difference in tax
liability when the surviving spouse goes to sell the property.

The new community property with right of survivorship form of ownership combines the
tax advantages of community property with the survivorship rights of joint tenancy. Civ.
C. Â§682.1 provides that property held under this form of ownership will pass to the
survivor, without administration, subject to the "same procedures as property held in
joint tenancy". Technically, this would mean that the surviving spouse should be able
to record an Affidavit of Death of Joint Tenant, although I would suspect that this
document may be renamed when it is used to terminate title held as community property with
right of survivorship.

In order to create this new form of ownership, the deed into the husband and wife must
specifically state the vesting as "husband and wife as community property with right
of survivorship". One unusual provision of this new law, however, is that the deed
must also be signed or initialed by the husband and wife. Thus, whereas a deed usually
only requires only the signature of the grantor in order to be valid, any conveyance deed
that transfers title as "community property with right of survivorship" should
have the signatures of both the grantors, and the husband and wife as grantees.

Question 2:

I appreciate your consideration in this matter. My daughter is in a predicament. She has been married for 2 years. She and her husband searched together and bought a home. They moved into the home and about 6 months later married. His grandmother co-signed and my daughter was not put on the title.
They are refinancing and signing papers this coming week. He has told her that he does not want her on the title. He wants her to sign a quitclaim. My daughter has put her own money and much work into the house. Should they divorce, does she lose all claims on the house if she signs the quitclaim?

Answer:

Simply stated, your daughter is being asked to give up her community property rights to the house. What is likely happening is that your son-in-law is refinancing the house in his name alone. In order for the title company to insure the property as being vested in his name as a married man, as his sole and separate property, it would be necessary for your daughter to sign the quitclaim deed to relinquish whatever community property rights she may have. If she does so and they later divorce, it would be extremely difficult for her to assert any interest in the property.

Before signing any quitclaim deed, I would urge your daughter to speak with a family law attorney who could advise her of the consequences in the event of a divorce.

Question 1:

We are buying a house and are in the middle of an escrow in California which closes
in approximately 60 days. The seller is an elderly widow and we're concerned about
her health. In the event of her death prior to the close of escrow, will the sale of the
house be suspended and/or go to probate? How could we avoid this? We really want to close
on this house.

Answer 1:

Unfortunately, the shorthand answer to your query is that if your
seller were to die prior to the closing, it would delay your transaction because
the property would now belong to her estate.

The question then becomes how long your delay would be, and this
largely depends on how large the estate is, and whether the heirs want to proceed with the
sale. In California, the Probate Code allows for a "summary probate" in the case
of a decedent who dies leaving a total gross estate of $100,000.00 or less. In that
situation, the heirs can file a Petition with the Superior Court to determine succession
to the property. Once the court grants its order, it can be recorded with the county
recorder's office, and the heirs can then proceed with the sale, if they so desire.
This is usually a much quicker and easier procedure than the "full-blown"
probate. However, if the total gross value of the estate exceeds $100,000.00, then a full
probate would be required. In that case, the personal representative of the estate might
still be able to proceed with the sale without court supervision, depending on the scope
of his or her authority, and whether any objections are received from the heirs after
proper notification.

Unfortunately, there is little you can do to protect yourself, other
than to try and close the escrow as quickly as possible. Once the seller passes on, the
property becomes part of the estate and it would take either a Petition to Determine
Succession, or action through the probate court in order for the sale to proceed.

Question 1:

Can you tell me how I can find out what an affidavit of death says? My husband died
and I've been told I need to file an affidavit of death for our house, but I don't
know where to get the form.

Answer 1:

The "affidavit death of joint tenant" form is used to
terminate a joint tenancy when one owner has died. You must attach a certified copy of the
death certificate to the affidavit, and record it with the county recorder in the county
where the property is located.

Basically, the affidavit states that the person named in the death
certificate is the same person as the one named in the property deed. You will need to
include the deed recording date, the deed instrument number and a legal description of the
property in the affidavit. In order for the affidavit to be recorded, you also must sign
it in front of a notary. Once recorded with the death certificate, the affidavit
terminates the joint tenancy and you will then be considered the sole record owner of the
property.

Bear in mind, however, that the affidavit will only work if you and
your husband held the property in joint tenancy. If you held title as tenants in common or
as community property, you need to follow different procedures.

This form can be obtained from any title company, and sometimes at
local stationary stores.

Question 1:

I own a business in Buena Park that faces the Santa Ana Freeway. I know that this section
of freeway eventually will be widened. I've read about businesses in Anaheim fighting with
Caltrans over being forced to relocate for that freeway widening. I wouldn't want to give
up my freeway location without a fight. It brings me sales because I'm so visible. What
are my rights?

Answer 1:

Unfortunately, the California Department of Transportation has the right to take your
property through eminent domain. This right exists so that government can act for the
greater good, even though individual property owners may suffer.

But you do have rights. If you own the property, Caltrans must make a fair market offer
for your property, based on comparable properties. If it is determined that a replacement
site can not be purchased for that price, you may be eligible for a purchase supplement
that makes up the difference. For example, if Caltrans offers you the fair market value of
$150,000 for your property, but agrees that replacement property can't be found for less
than $170,000, Caltrans may pay you the difference.

If you do not agree with Caltrans' offer for your property, you can appeal it to the
agency and, if you lose, can take Caltrans to court over the issue. Some property owners
along the Santa Ana Freeway in Anaheim have won these cases and received a court-ordered
payment for their property that was higher than the Caltrans offer.

Whether you own or rent your business site, Caltrans offers some assistance in finding a
replacement site and pays reasonable moving costs. Renters also may qualify for some
rental assistance if replacement property is more expensive.

As you may have guessed, the one thing you cannot do is stop this process. You may delay
it and you may try to get a higher payment from Caltrans, but you will have to move.

Question 1:

We are in a position that a Joint Tenancy needs to be reversed back
to the original owner. I need to know what the process is to accomplish this without being
reassessed for taxes. Can you please shed some light on how we do this with the county to
change the title?

Answer 1:

I don't know the particulars of your situation, but if this was
a case where the owner had deeded the property to himself (or herself) and another person
in joint tenancy, deeding it back to the original owner should not trigger a reassessment
for tax purposes.

Under Rev. & Tax Code Section 65(b), the creation or transfer of
a joint tenancy interest is not considered a "change of ownership" for
reassessment purposes if, after the transfer, the original owner is one of the joint
tenants. Similarly, Rev. & Tax Code Section 65(c) states that if such a joint tenancy
is then terminated, the termination will not be considered a "change of
ownership" so long as the property revests, in whole or in part, in the original
owner.

Unfortunately, if the original owner is not one of the current joint
tenants, transferring the property back to him would probably trigger a reassessment.
However, the Revenue and Tax Code contains a number of other exceptions to the
reassessment rule. To determine if your transaction would qualify for one of these
exceptions, consult your attorney.

Question:

My father died recently and I inherited the house he and my mother lived
in for 25 years. I put it up for sale and found a buyer quickly. But I was surprised to
find that the title report shows a deed of trust from a debt I'm sure my parents paid off
years ago. My dad wasn't the type to let a debt go unpaid. How can I get rid of this lien
so I can clear the title and complete the sale? I just want to put this behind me.

Answer:

First, get a copy of the deed of trust from the title company. It's
possible that the effectiveness of the lien has expired if the debt is really old. With
certain exceptions, a lien of this type can expire and become unenforceable 10 years after
maturity - the date fixed for the last payment, if it can be determined from the deed of
trust - or 60 years after the recording date, if maturity can't be determined.
Unfortunately, many deeds of trust don't include a payment schedule so maturity may be
impossible to determine.

If the deed of trust has not expired, or it can't be determined if it has expired, look at
the upper left-hand corner of the deed of trust for the name and address of the
beneficiary. If that party is still in business or their successor in interest can be
located, you might convince them that the debt has been paid and get a reconveyance of the
deed of trust. With an old debt, however, you may find that no representative of the
beneficiary can be found.

In this case, your options are a little more expensive. The law allows you to post a
corporate bond - typically for more than the amount of the debt - and record it to clear
title to your property. The bond must describe the deed of trust and be acceptable
to the trustee named in the deed of trust. If the trustee cannot be found, you may
designate a title insurance company as the trustee in place of the beneficiary, if a title
company will agree. The actual bond amount is determined by a formula in Civil Code
section 2941.7.

If you can't afford the bond or can't find a company to act as trustee, another option is
to bring legal action to quiet title. The court would require proof of your
good-faith effort to locate the beneficiary - for instance, by hiring an investigator to
try to locate him or her. If you can prove you made your best effort, your attorney
might be able to get the court's permission to publish a summons in the newspaper and
eventually win a judgment clearing the title to your parents' home.

Question 2:

I am a real estate agent. I have a client who owns a house and is not
working at this time. She has a mortgage of about $110,000. Her boyfriend has been making
the monthly payments since she bought the house. Now she does not want the house anymore.
She told her boyfriend that she will transfer the house to him if he gives her $25,000.
Her boyfriend has very bad credit so he does not qualify to buy the house. Recently she
had surgery and the county paid all her expenses at the hospital. If she gives a grant
deed to her boyfriend and he records it, will the bank call the loan? Will the county
record a lien on the house due to the fact that the hospital paid for the surgery?

Answer 2:

While it is always hard to guess just what someone else might do in a
particular case, this is one where I would urge caution on the part of your client.

Typically, most promissory notes and deeds of trust prepared by banks
and other institutional lenders contain a "due on sale" clause which allows them
to call the loan due if the borrower transfers the property, or any interest in the
property, to someone else without the lender's consent. If that clause is in your
client's loan documents, it would give the bank the legal right to call the loan, but
whether it would actually do so would be a business decision on their part. However, since
the boyfriend is not terribly credit worthy, this might make them more ready to call the
loan than if he had a stronger financial position.

I'm not familiar with the law involving payments of medical
bills by the county, but if it allows them to put a lien on a patient's property,
they might try and set the transfer of the house aside as being a conveyance in fraud of
creditors. A "fraudulent conveyance" is one by an owner of property for less
than adequate consideration, which prevents a creditor from reaching the property in order
to satisfy its claims. The question, then, is whether $25,000 is adequate consideration
for the house. If there is only $25,000 in equity, and the boyfriend also agrees to assume
liability under the loan, then it might suffice. Unfortunately, this would be a question
of fact to be determined by the court if the transfer was ever attacked.

Please be advised that any transfer of real property can involve
significant tax and legal consequences, particularly where creditors are involved.
Accordingly, your client should not transfer any interest in her property without first
speaking with her own attorney and tax advisor, who can give her specific advice tailored
to her particular circumstances.

Question 1:

I have a client that needs to change her grant deed. She has one daughter on with her as joint tenants and wants to put the other one on also. Can she deed her half over to herself as tenants in common and legally break the J.T.? If she does this, then she absolutely needs to make a will to be able to leave her half to the other daughter, right?

Answer 1:

Your client certainly can break the joint tenancy by deeding her one half (1/2) interest to herself as tenant in common. The result would be that she and "Daughter No. 1" would each hold undivided 1/2 interests as tenants in common with one another. Normally, she would need a will to leave her 1/2 interest to "Daughter No. 2", but there may be another option. Once she breaks the current joint tenancy, she could then deed her 1/2 interest to herself and Daughter No. 2 as joint tenants. The upshot of this would be that she and Daughter No. 2 would own an undivided 1/2 interest as joint tenants as to each other, but they would be tenants in common with Daughter No. 1 as to the other 1/2 interest. However, in the event of your clients' passing, Daughter No. 2 would succeed to the 1/2 interest she holds with your client, so that both daughters would end up with undivided 1/2 interests as tenants in common.

Of course, everyone's situation is different, and any transfer of a real property interest can entail significant tax and legal consequences. Please note that this is intended only as a general discussion only of the law relating to joint tenancy, and is not intended to be, nor should it be construed as, specific legal advice. Before doing anything, your client should first consult with her own attorney and/or tax advisor, who can evaluate her situation and give her specific advice tailored to her particular circumstances.

Question 2:

We own property as joint tenants. Three married couples own this undeveloped lot and
one couple is divorcing. The other two couples, ourselves included, are paying the taxes
due and engineering fees to ready this lot for future sale. We are concerned about
continuing to pay taxes and fees, and make decisions with the knowledge of the divorcing
couple but without their financial assistance. We certainly want to collect their
share of the money we're investing at some point.

Answer 2:

First of all, the divorce in and of itself will not sever the divorcing couple's joint
tenancy. Regardless of their marital status, they will remain co-tenants with all of
those rights and obligations.

As far as taxes are concerned, joint tenants making these payments normally would be
entitled to a pro-rata reimbursement from the divorcing couple, absent an agreement to the
contrary. This also would hold true for mortgage payments, insurance premiums and
other ordinary expenses of maintaining the property.

On the other hand, this would not be the case for any improvements made in the property.
Absent a prior agreement, a co-tenant who makes any expenditures to improve the
property cannot compel contribution from other co-tenants. However, if there is an
agreement to share these costs, it normally would remain in effect regardless of any
divorce. In that case, the divorcing couple still would be responsible for their
proportionate share of improvements.

Be aware, however, that any transactions involving real property can entail significant
legal and tax consequences. Before deciding whether to move ahead with your plans
for the property, you should first consult your own attorney and tax advisor, who can
fully evaluate all the circumstances.

Question 3:

I am refinancing my home. My sister and I have jointly owned the property through a
private agreement, but now we are going to be listed on the loan and title papers as dual
owners. What is the best way to record title? I understand that being tenants
in common means the county will reassess the property for taxes, but joint tenancy does
not. Is reassessment based on the market value of the property? Or the refinanced
value?

I also understand that joint tenancy overrides any wills so my share would default to my
sister and not go to my children. Any information you can offer would be great.

Answer 3:

First of all, my response is based on the assumption that your sister is not presently on
the title as an owner, but will be placed on title when the new loan records. Under
Proposition 13, approved by voters in 1978, property ordinarily is reassessed whenever a
change in ownership occurs. However, the law provides exemptions, including the
creation or transfer of a joint tenancy interest where the original owner remains a joint
tenant after the transfer. This means that if you were to deed the property to yourself
and your sister as joint tenants, there would be no reassessment since you still would be
on title as an owner. On the other hand, if you create a tenancy in common there
WOULD be a reassessment, regardless of whether or not you remain on title.

Whenever a property is reassessed, it is based on the fair market value as of the date the
change in ownership occurs. However, if a reassessment is triggered because you
decide to hold title as tenants in common, only the value of your sister's interest would
be reassessed, not the entire property.

You are correct that the principal feature which distinguishes a joint tenancy from a
tenancy in common is the right of survivorship, overriding any will. The moment a joint
tenant dies, her financial interest vests immediately in the surviving joint tenants, and
there is no interest left for her estate.

Be aware that transferring any real estate interest can involve significant legal and tax
consequences, and you should consult with your own attorney and tax advisor before moving
ahead.

Question 4:

I am considering buying a house with my girlfriend. I'm a little concerned about
the legal ramifications of this major move. What if we break up? What if one of us
dies? Will I be forced to sell the house if either happens? Is there legal
language that will help us deal with these possibilities?

Answer 4:

There are two forms of ownership which have serious ramifications in your situation.
The distinguishing feature is the right of survivorship.

If you and your girlfriend become joint tenants, you commit to let the house become the
property of the surviving owner if one of you dies. To create a joint tenancy, the deed
actually must say that you are owners "as joint tenants." If you do this,
neither of you can will away your portion of the house and your heirs may not claim your
portion of the house after your death.

This decision can be reversed after you buy the house. You can record a declaration that
you are severing the joint tenancy or you can record a deed giving your house interest to
yourself and end the joint tenancy.

Your other option is to buy the house as tenants in common. This is the presumed situation
if the deed does not contain any references to joint tenancy. If one of you dies during
your tenancy in common, that person's portion of the house becomes part of his or her
estate.

Unfortunately, you can't protect yourself from the fallout of a bitter breakup. Under
either form of ownership, an owner may sell the portion of the house they own, gift it to
someone or bring legal action to partition the property.

Partitioning the property can occur in one of three ways: the court can order the property
physically divided; can order it sold and the proceeds divided; or can allow one owner to
buy out the other after a fair appraisal. As you can see, you could be forced to sell the
house.

I have two other warnings for you. There are tax ramifications to your choice of ownership
options and you should consult your financial advisor before making a decision. And you
may want to consider the legal ramifications of owning property together under the Marvin
vs. Marvin palimony decision.

Question 5:

I am interested in changing title to my condominium from just my name
to that of my husband and myself. Is there a way that I can perform this transaction
myself, or do I need the aid of a real estate broker or lawyer? In other words, what is
the least expensive way for a literate, high-functioning person to get this done?

Answer 5:

In order to change the title, you would need to execute either a
Quitclaim Deed or a Grant Deed from yourself as grantor to yourself and your husband as
the grantees. The Deed would need to be notarized, and recorded in the office of the
County Recorder in the county where the property is located. Either type of Deed would
work; the main difference being that a Quitclaim Deed conveys whatever title (if any) the
grantor has in the property, while the Grant Deed contains certain implied warranties of
title.

This is something you could probably handle yourself by obtaining a
Deed form from a title company, completing it and recording it with the appropriate county
recorder. Bear in mind, however, that how you hold title (i.e. as joint tenants, tenants
in common, or community property) can have important legal and tax ramifications, so you
may want to consult with your legal and/or tax advisor before recording the instrument.
However, once you have determined how to hold title, the actual process for completing and
recording the Deed is relatively straightforward.

Question 6:

My father passed away and he left his property in trust for us kids.
He had remarried, but kept this as his sole and separate property. He gave his new wife
the right to live there as long as she did not cohabitate, vacate for 6 months, etc. She
does not like us and is trustee. I found out she had a sale pending (I suspect to a
friend) and is using our equity to make things nicer for the buyer than required for the
sale. She will receive no money just satisfaction from wasting ours. Here is the question:
the house went into escrow and there is a cloud on title. My dad never removed my mom from
the property. She is a joint tenant. The divorce papers instructed her to deed it to him
and I guess he never got around to recording it. No one can find it. Could she just deed
us the house and circumvent this whole lousy sale or does the new wife's trust have
more clout than the joint tenancy? Is it poetic justice if the trust does not have legal
status for failure to record a quitclaim? I will see an attorney and I need to know which
one wins: the living trust or the deed. Can a judge rule against a deed? This house is now
in escrow and I feel we are being cheated.

Answer 6:

This is a tricky one. Ordinarily, the short answer to your question
would be that your Mom is now sole owner of the property. When property is held in joint
tenancy, it passes to the survivor immediately upon the death of one joint tenant. As
such, there is nothing to pass with the decedent's estate, whether by will, trust, or
otherwise.

The complicating factor here is that your parents divorced, and the
court awarded the property to your Dad as his sole and separate property. Arguably, the
deed from your Mom would have been a mere formality, and your stepmother, as trustee under
the trust, could now bring an action against her to quiet title.

The silver lining to all of this, I suppose, is that your stepmother
is going to have a difficult time selling the property until the title is cleared. If the
chain of title reflects that your Dad and Mom held the property as joint tenants, than a
title company is not going to be able to insure the sale until your stepmother establishes
her title to the property as trustee.

The best advice I could give you is to see your attorney right away,
so he or she can thoroughly evaluate the situation, and advise you how best to proceed.

Question 7:

In 1979 my husband purchased a condo as his sole and separate property. Shortly after, he was involved in a live in relationship. She subsequently had him include her on the deed as joint tenants, then later changing (possibly forging) the deed to tenants in common. The relationship ended in 1980 and my husband married in 1983 at which time He tried to get the deed straightened out as he was paying all the taxes and payments on the property. She is not on the loan or the taxes.

We are in the process of filing a quiet title and the judge has set a date for a dismissal of the issue. Besides filing a quiet title, is there anything else that can be done?

Answer 7:

Unfortunately, based on what you've told me, about the only thing your husband can do at this point is to file a quiet title action. Apparently, your husband put her on title voluntarily, and this gave rise to an ownership interest in the property. Whether the property is now held as joint tenancy or tenants in common is really immaterial since she would hold an ownership interest in either case. Legally, a joint tenant can execute a deed of her interest back to herself as a tenant in common, and this is sufficient to break the joint tenancy. The consent of the other joint tenant is not required. The only ramification of this would be that if the lady died, your husband wouldn't automatically become the owner of her share through right of survivorship; it would pass with her estate instead. As I'm sure your husband's attorney has explained, in order to successfully quiet title to the property, your husband will have to establish that the transfer of the interest to the lady was somehow conditional, and that the condition(s) was/were not satisfied. If it appears to the court that the transfer was intended as an absolute gift, however, he will have a very difficult time convincing the court to divest the lady of her ownership interest.

Question 1:

I hired a contractor to add a room onto my house. I've paid him but he hasn't paid
his subcontractors. The unpaid subcontractors filed liens on my home! How do I
get out of this mess?

Answer 1:

First, there are a couple of steps you can take to prevent such problems before a project
starts. You can require the contractor to take out a performance bond. If
liens are filed wrongly, you file a claim with the bond company and they pay the
subcontractors, who then release the lien. Performance bonds, however, can be expensive
and may not be appropriate for small jobs. A better tactic, probably, would be to require
the contractor to submit signed lien releases from his subcontractors and his material
suppliers before you hand over final payment for the job. This protects you from any
liens being filed.

But it's too late for that. You might need to contact an attorney and file a lawsuit
to settle the matter. If the amount in dispute is less than $5,000, you may file a
small claims court action against the contractor for a small fee. Win or lose in
court, you still would have to pay the lienholders off in order to get the liens released.

You also may file a complaint with the Contractors State License Board. This board
must investigate each complaint and the contractor must respond to the complaint.
The contractor's license hangs in the balance if he does not.

Question 2:

A friend of mine had a terrible experience with a contractor. Her home remodel
dragged on forever and it seemed it never would be finished. I'm planning to add on
to my home and want to avoid a similar situation. What can I do to prevent problems?

Answer 2:

There's no substitute for doing your homework and thoroughly checking out a contractor's
qualifications and references before choosing one.

Happy customers are the best references. Ask any prospective contractor to provide
names, addresses and phone numbers for satisfied customers. Call them and quiz them
about the contractor's work.

You should also check with the state Contractors State License Board (800-321-2752) to
ensure your contractor has a current license. Ask if any complaints have been filed
against the contractor and whether they were satisfactorily resolved. A few resolved
complaints aren't necessarily a problem. But a long list of complaints is a definite
danger sign. At the very least, it indicates you might have a tough time working
with the contractor.

Taking these precautions does not guarantee a trouble-free remodel but it does minimize
potential problems.

Question 1:

A residential care home for the elderly is planned for my neighborhood. I'm
concerned about traffic impacts. Do city laws or zoning codes cover this situation?

Answer 1:

There's not much a city can do about a residential care home proposed for a residential
area. That's considered an appropriate fit. In addition, state laws regulate
these kinds of operations and override city zoning laws, leaving local government
officials' hands tied.

If a residential care home, halfway house or
recovery house opens in your neighborhood and causes problems with traffic, noise or
crime, you can take the owner to court. In fact, all of the surrounding neighbors
can file individual small claims court actions, an inexpensive way to address a problem
property that is detrimental to the neighborhood.

If enough neighbors file these actions, the property
owner could find himself or herself with substantial liability even though damages in each
individual case are limited to $5,000. This technique has been used effectively in
several instances where landlords rented to undesirable tenants who created a nuisance in
the neighborhood.

Before such a home actually is open and operating,
however, your options are few.

Question 2:

We live in Orange, CA. Our backyard is adjacent to another backyard. The house is a rental. The trees in their yard are large and are hanging over into our yard and creating a mess in our pool. We've tried on several occasions to discuss this with the tenants (different tenants over the y ears). I'm tired of paying for keeping their trees trimmed but the tenants have always refused to give us the contact information for the owner (who apparently lives in San Francisco). What, if anything can be done?

Answer 2:

You have the right to have the trees trimmed back to the property line, but the owner unfortunately has no obligation to remove them. You would have the right to bring an action for an injunction and/or damages against the owner of the property if the trees are such that they threaten damage to your property, but whether they do or not would be a question of fact for the court to decide. You may want to consult with a local real estate attorney who can evaluate the situation and give you specific advice as to your possible rights and remedies.

Question 1:

I accepted an offer for my house and escrow was opened. The buyer deposited his
$25,000 down payment into escrow and then, a week later, wanted to back out of the deal.
Now we're battling over the $25,000. I say I keep the down payment because he
chose to back out of the deal, leaving me in the lurch. He's demanding that the escrow
company give his money back. I've instructed the escrow company not to release the
money to him but I don't know what's going to happen. Can you give me a clue?

Answer 1:

If the escrow instructions do not clearly state what will happen in this situation, the
escrow company may "interplead" this case to court. That means that a
disinterested third party - the escrow company - wants to get out of the middle of this
dispute and turn it over to the courts. The escrow company likely will be released
from the case and a judge will decide whether the buyer or the seller should get the
disputed down payment.

This situation serves as a reminder of how important clear and complete escrow
instructions can be. If the instructions said clearly what should happen if the
buyer failed to perform and complete the deal, the escrow company could have followed
those instructions and released the money to the correct party without going to court.

Question 2:

I am a Realtor who recently sold a house for an agreed-upon 6 percent
commission. Without my knowledge, the seller submitted a supplemental escrow
instruction lowering my commission! Doesn't the escrow company have to pay my full
commission anyway? Can I sue the company?

Answer 2:

A Realtor or real estate broker is not a party to escrow, so you have no
legal interest in the escrow instructions. The seller is a legal party and the escrow
company had no choice but to follow the seller's instruction.

There is one exception to that. If an irrevocable assignment of the commission had been
placed into escrow, the seller would not have been able to submit a change to your
commission. You might want to consider this the next time you sell a house.

This is not to say that you do not have recourse. You do. The seller is liable
and can be sued in hopes of making him or her pay the full commission.